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EY FinTech Adoption Index 2017The rapid emergence of FinTech

EY FinTech Adoption Index 2017 | 3

When EY launched the first global EY FinTech Adoption Index in 2015, FinTech was still in its relative infancy. We found that one in seven digitally active consumers were already FinTech users. In 2017, we find that adoption has risen dramatically to one in three.

In 2017, our research includes 20 markets and over 22,000 online interviews, providing a global perspective on FinTech. We now find that on average one in three digitally active consumers use two or more FinTech services. That is significant enough for us to suggest that FinTech has reached early mass adoption.

A common assumption is that FinTech firms struggle to translate innovation and great customer experience into meaningful numbers. In contrast, our findings reflect considerable consumer appetite for new and innovative financial service products that take advantage of new consumer technologies, such as mobile and cloud. Nowhere is that more apparent than in the historically underserved emerging markets, with China and India leading FinTech adoption across our study.

In this report, we lay out our findings from the EY FinTech Adoption Index and also present some fascinating stories of FinTech entrepreneurs who have reached real consumer adoption. We encourage other FinTech firms and traditional financial services companies to consider how these examples, as well as other firms including their own, are driving change and innovation within financial services.

We have observed a host of new FinTech firms, business models and consumer propositions entering the market, including entrepreneurial start-ups, major technology firms, and branchless mobile banking services. We can also see the seeds of the next evolution of financial services, with further FinTech adoption facilitated by the move toward data sharing, open Application Programming Interfaces (APIs), biometrics, and the application of artificial intelligence and robotics.

We believe that the financial services industry has considerable unexplored potential, and are excited to continue monitoring how FinTech and financial services evolve in future years. In the meantime, we hope this report provides a holistic view of FinTech adoption around the world, as well as provide insight and inspiration to FinTechs, financial services firms and policymakers alike.


Imran Gulamhuseinwala OBE EY Global & Europe, Middle East, India and Africa FinTech Leader

Matt Hatch EY Americas FinTech Leader

James Lloyd EY Asia-Pacific FinTech Leader

4 | EY FinTech Adoption Index 2017

1. Executive summary 5

2. FinTech adoption: the numbers 11

3. Adoption strategies: what really works? 24

4. Implications in perspective 27

5. FinTech in action: the case studies 30

6. Appendix 38


AcknowledgementsSpecial thanks to our panel of FinTech contributors:Acorns Australia, Ant Financial, ClearScore, Lufax, Nubank, PayPal and Zerodha

EY FinTech Adoption Index 2017 | 5

1. Executive summaryFinTech: organizations combining innovative business models and technology to enable, enhance and disrupt financial services.*

The rapid emergence of FinTech

The rapid increase of FinTech firms operating in the financial services industry, and the corresponding VC and corporate investment in this sector, has attracted significant attention from both industry observers and the media.

We launched the first EY FinTech Adoption Index in 2015 to cut through the hype and understand whether digitally active consumers were actually using FinTech services on a regular basis. The answer at the time was yes: 16% of our surveyed consumers had used two or more FinTech services in the prior six months, with adoption potentially doubling in the near future. The 2017 study reveals that this has happened in just 18 months.

Findings from the 2017 study show that FinTech firms have reached a tipping point, and are poised for mainstream adoption across our 20 markets. Building upon the strength of their core characteristics of focusing on the customer proposition and leveraging technology in novel ways, FinTech firms are gaining traction in the market. In the process, they are blurring boundaries between financial products and lifestyle propositions, as well as defining new standards within financial services.

FinTech firms share two core characteristics: a laser-like focus on the customer proposition and a willingness to apply technology in novel ways. These are powerful differentiators in a marketplace where many product-focused incumbent financial services companies struggle to deliver the seamless and personalized user experiences that consumers increasingly expect.

Consumers are drawn to FinTech services because propositions are simpler, more convenient, more transparent and more readily personalized. This has a ripple effect across the industry as consumers come to expect these characteristics in all financial products, regardless of whether in retail banking, wealth management or insurance, and of who is providing the service.

* FinTech: Our definition refers to an industry that includes not only early-stage start-ups and new entrants, but also scale-ups, maturing firms and even non-financial services firms.

6 | EY FinTech Adoption Index 2017

2 Hong Kong SAR of China.

1 The number of markets covered in our survey has expanded. Our 2017 study presents FinTech adoption across the 20 markets surveyed of 32.8%. Our 2015 study covered six markets and used a different, population weighted average, which was 15.5% across the six markets. For comparison purposes, applying the 2015 methodology and set of six markets to the 2017 survey data also results in an average adoption of 33.2%. All figures have been rounded to the nearest whole percentage in this report.

Highlights from the 2017 EY FinTech Adoption Index:





is the average FinTech adoption globally, compared with 16% in our 2015 study.1

is the average FinTech adoption across emerging markets: Brazil, China, India, Mexico and South Africa.

of consumers use FinTech money transfer and payments services, and 65% anticipate doing so in the future.

of FinTech users prefer using digital channels to manage all aspects of their life, compared with 38% non-users.

of consumers are regular users of five or more FinTech services (FinTech "super users").


We identify 17 distinct services offered by FinTech organizations and non-traditional providers, and refer to these as FinTech services. These services are considered within the five broad categories of money transfer and payments, financial planning, savings and investments, borrowing, and insurance.

We define a regular FinTech user as an individual who has used two or more FinTech services in the last six months.

Our 2017 research is based on more than 22,000 online interviews in 20 markets. Our surveyed population is drawn from a demographically representative sample of each market to the extent available, and all references to consumers relate to individuals who are active online, which we refer to as digitally active in this report.

We have applied unweighted averaging of results, using a one market, one vote approach to report findings, to offer a global, cross-market perspective on themes and trends. The 20 markets are Australia, Belgium and Luxembourg (considered as one market for the purpose of our analysis), Brazil, Canada, China, France, Germany, Hong Kong,2 India, Ireland, Japan, Mexico, the Netherlands, Singapore, South Africa, South Korea, Spain, Switzerland, the UK, and the US.

EY FinTech Adoption Index 2017 | 7

1. FinTech has achieved initial mass adoption in most markets

The average percentage of digitally active consumers using FinTech services reached 33% across the 20 markets. Benchmarked to academic theory on innovation adoption, it suggests that FinTech services have reached a milestone in being adopted by the early majority of the population.3 There is evidence of increasing awareness: for the six markets where a comparison is available, 84% of customers are aware of FinTech services in 2017 compared with 62% in 2015.

This is driven in part by the emerging markets in our study: FinTech adoption by digitally active consumers in Brazil, China, India, Mexico and South Africa average 46%, considerably higher than the global average. From an individual market perspective, China and India have the highest adoption rates at 69% and 52% respectively. This is because FinTech firms excel at tapping into the tech-literate, but financially underserved population, of which there are particularly high ratios in emerging countries.

3. FinTech users prefer using digital channels and technologies to manage their lives

Unsurprisingly, use of FinTech products and services is higher among younger consumers. Those with the highest use, 25- to 34-year-old consumers, are not only tech-savvy digital natives, but are also at the age where they have a greater need for financial services. In some markets, they have not developed many strong relationships with incumbent providers, and are willing to consider non-traditional options as alternatives.

FinTech users (across all ages) share similar views toward personal risk, and are equally likely to read the terms and conditions of new products or worry about personal data security. However, 64% of FinTech users prefer managing their lives through digital channels, compared to 38% of non-FinTech users; FinTech


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